Sobha Ltd Q1 FY27 Earnings Call: Record Quarterly Pre-Sales of Rs. 3,656 Cr, Guides EBITDA Margin to 17-20% by Q4

Sobha Ltd held its Q1 FY27 earnings call on July 20, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Sales and Strong Revenue Growth Mark the Quarter

• Total income of Rs.1,330 crores — up 48% YoY, led by real estate revenue of Rs.1,107 crores (+60% YoY) driven by delivery of 1.24 msf (819 homes).
• Record quarterly pre-sales of Rs.3,656 crores — up 76% YoY, driven by 2.34 msf sold across 1,432 homes at an average realisation of Rs.16,655/sf.
• PAT surged to Rs.50.7 crores — from Rs.13.5 crores in Q1 FY26, supported by higher revenue recognition, improved mix, and financial discipline.
• Net cash position of Rs.659 crores — gross debt of Rs.1,110 crores against cash of Rs.1,769 crores; net debt-to-equity stands at negative 0.14.
• EBITDA margin of ~9.7% in Q1 FY27 — management expects significant improvement to 17–20% by Q4 FY27 as high-margin projects complete in H2 FY27.

Record Quarterly Sales, Robust Launch Pipeline Across Geographies

• Bangalore and NCR drove ~87% of Q1 sales — Bangalore contributed 57% (Rs.2,067 crores) led by Sobha One World and Sacred Grove; NCR delivered its highest-ever quarterly sales of ~Rs.1,384 crores from Sobha Crescent.
• Sobha One World accounted for ~45% of total Q1 sales — with a spillover of Rs.200–Rs.300 crores expected to be booked in Q2 FY27.
• Three new projects launched in Q1 FY27 — with a combined saleable area of 6.89 msf and potential sales value of ~Rs.10,000 crores.
• Forthcoming launch pipeline of 20.77 msf across 17 projects — management is confident of launching 9 projects (~8.2 msf) in the remaining 9 months of FY27, translating to a GDV of ~Rs.12,000 crores at an average price of Rs.15,000/sf.
• Geographic mix of upcoming launches — Bangalore (3 msf), NCR (2 msf), Hyderabad (1.7 msf), and Kerala (1.5 msf). Sobha Crescent Phase 2 is planned for Q3 FY27.
• Unsold inventory of 14.94 msf — at end of Q1 FY27 provides strong forward sales visibility alongside the launch pipeline.

EBITDA Margin Expected to Double by Q4 FY27 on High-Margin Completions

• Revenue yet to be recognised of Rs.20,556 crores — from past sales, with margin expansion expected as FY23-vintage projects complete.
• EBITDA margins guided to improve sharply — from ~9.7% in Q1 FY27 to 17–20% by Q4 FY27, driven by completions of high-margin projects in H2 FY27.
• Projected margin on forthcoming projects declined to Rs.68.3 billion — (from ~Rs.86 billion previously) attributed to a shift in mix toward more joint development projects and the exclusion of the higher-margin Hoskote project (own land).
• PAT growth driven by mix and financial discipline — Q1 FY27 PAT of Rs.50.7 crores represents a ~275% YoY increase from Rs.13.5 crores in Q1 FY26.
• Projected cash flow from ongoing projects of ~Rs.12,000 crores — based on projected receivables and unsold inventory of Rs.31,000 crores against an estimated remaining cost of Rs.19,000 crores.

Strengthening Balance Sheet with Disciplined Land Investments

• Net debt target of zero in FY27 — management envisages the company reaching a net debt of about zero level during the current fiscal year.
• Land capex expected at Rs.1,500–Rs.1,600 crores in FY27 — up from Rs.1,160 crores in FY26, including Q1 land payments of Rs.370 crores for acquisitions in Mumbai (1.3-acre outright) and Greater Noida (joint development).
• NCD issuance of Rs.1,000 crores approved — to be issued in tranches over the next couple of quarters, contingent on identifying and firming up acquisition opportunities.
• Operating cash flow target of Rs.2,000 crores for FY27 — management sees this as a sustainable annual run-rate over the next few years. Q1 operating cash inflow stood at Rs.1,924 crores (+8.2% YoY).
• Capital allocation discipline — new land acquisitions are expected to cost about 15% of the total potential sales value of the project. Remaining commitments of Rs.600 crores (out of total Rs.970 crores) with an additional Rs.600–Rs.700 crores planned for new land in NCR and Bangalore.
• Borrowing cost remains low at 7.62% — reflecting the strong balance sheet and net cash position.

Delivery Guidance Raised, Wage Hike Impact Contained

• FY27 delivery guidance of 6–6.5 msf — representing ~20% growth over the 5.4 msf completed in FY26. Q1 FY27 saw 677 homes (1.08 msf) completed.
• Pre-sales growth target of ~30% for FY27 — management reiterated this target with potential upside if all launches occur on schedule.
• Karnataka government's minimum wage hike — management acknowledged the "60% hike in Karnataka's minimum wages" implemented in Q1 FY27, stating the impact is "still under evaluation" but expected to be minor as almost all of Sobha's technician workforce is already paid above the new minimum wage, limiting direct cost exposure.
• Other businesses generated Rs.170 crores revenue in Q1 — including commercial rental income of Rs.23 crores. Management expects FY27 other business revenue to be similar to FY26.
• Commercial project in Gurgaon (6 lakh sf) removed from launch pipeline — management is evaluating a build-and-hold (rental income) model instead of a sale model, and may bring it back if a sale model is adopted.